Martin Brüdermüller started his new job as chief of BASF today. Dubbed the “John Wayne” of the chemicals industry, he plans major investments in R&D at Europe’s largest chemicals maker, reasoning that patented products will be the most profitable and make BASF more successful, faster.
Mr. Brüdemüller takes his inspiration from 3M, which has an established culture of innovating that he wants to emulate. The American conglomerate is 104 years old but is still renowned for innovations ranging from Scotch tape and Post-its to dry powder inhalers and nasal antiseptics. Its secret, along with cash, is mobile teams with time dedicated to new science.
So the new CEO will pour an annual €1.9 billion ($2.2 billion) into research and development, making BASF the second-highest investor in innovation in the chemicals sector after Dupont. BASF makes petrochemicals, vitamins, glues and other mixes used to make paper, pharma and hygiene products, for example. But the company has struggled with innovation lately, pumping cash into organic photovoltaics or plant biotechnology which didn’t bear fruit.
Investors welcome Mr. Brüdermüller’s fresh approach and want to see him make BASF a leading innovator and a “strong player in agrochemicals,” according to Markus Mayer, a chemicals expert at Baader Bank of Germany. He expects the new boss to restructure away from commodities and towards becoming a stronger provider of specialty chemicals. That is easier said than done, though, as peers in the sector struggle to make products sufficiently specialized that they cannot be simply copied by rivals.
Mr. Brüdermüller will also remain chief technology officer and drive renewal through the company, along with boosting its digital capacities. He knows the business well, after training as a chemist in Germany and the US. In 30 years at BASF, he has seen multiple stations, from sales to strategy, pharma to the ammonia lab to functional polymers. And nine years in Asia gave him a sense of how the region’s companies are hungry to seize the market.
Even though Mr. Brüdermüller calls himself a risk taker, full of energy and enthusiasm, beyond innovation he will chiefly implement the strategy created by his predecessor, the sober, analytical Kurt Bock.
But he inherits a company in good shape: Announcing its quarterly figures today, BASF revealed a higher operating result for the first quarter, which was already strong last year. Revenues reached €16.6 billion, down only 1 percent despite currency effects, and the company performed better than peers such as Dupont, Azko or Solvay, though it was behind Covestro. BASF also said it would stick to its forecast for the year.
But though he calls his approach to the business evolutionary, rather than revolutionary, Mr. Brüdermüller has challenges ahead. Beyond beefing up the company’s specialized chemicals, he will also have to integrate €9 billion-worth of acquisitions: Bayer’s seed business and Solvay’s polyamide production. Some of BASF’s M&A might seem modest compared to other deals in the sector but are the biggest in several decades for the company and, as such will require some chemical changes.
Siegfried Hofmann is Handelsblatt’s chemical and pharmaceutical industries correspondent. To contact the author: firstname.lastname@example.org